EUR/USD: The pair failed to benefit from better than expected macro data

EUR/USD

The pair failed to benefit from better than expected macro data (German ZEW), as well as favourable 10y guidance from the Spanish Treasury (books of almost EUR 24bln) and instead settled lower as disappointment linked to the lack of aggressive action from the BoJ weighed on riskier assets. In terms of technical levels, supports are seen at1.3257/48 and then at 1.3200. On the other hand, resistance levels are seen at 1.3372/98 and then at 1.3404.

GBP/USD

Even though Sterling’s safe-haven status has been questioned over the past few months, the pair settled higher and benefited from safe-haven related flows as markets reacted negatively to the fact that the BoJ refrained from aggressive policy easing. Going forward, market participants will get to digest the release of the most recent policy meeting minutes from the BoE on Wednesday. In terms of technical levels, supports are seen at 1.5800, 1.5778 and then at 1.5771. On the other hand, resistance levels are seen at the 30Day lower Bollinger level at 1.5882 and then at the 200DMA line at 1.5907.

USD/JPY

Overnight, the BoJ pledged an open-ended commitment to buy assets, but kept the key overnight rate at 0% to 0.1%, to achieve 2% inflation target as soon as possible. The BoJ will increase their current asset buying programme by JPY 10trl in 2014 and the BoJ's open-ended purchases are to start from January 2014. As a result, the spot rate (USD/JPY) trended lower throughout the session, which was also reflected in implied vols in options market. In terms of technical levels, supports are seen at the psychologically important 88.00 level, 87.79 and then at 87.40. On the other hand, resistance levels are seen at 90.25/59 and then at 90.64.

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